The present invention relates to a method for designing and executing marketing campaigns for increasing the revenue received from a business's existing customer base. The invention also provides a system for supplying analytical tools necessary to implement the revenue boosting method.
Revenue is a key component of profit. In order to increase profit a business has two fundamental options: increase revenue and/or decrease costs. The focus of the present disclosure is increasing revenue. There are a number of ways a business may increase revenue. A business may add new products or services to its existing line of products and services in hopes of increasing its overall sales. A business may attempt to attract new customers for its existing products or services. Or, a business may attempt to increase the revenue it receives from the sale of its existing products and services to its existing customer base. This last approach is especially well suited to businesses that provide services to customers on an ongoing basis. Such businesses, for example telecommunications companies, have ongoing relationships with their customers and are well positioned to take steps to stimulate revenue growth among their existing customer base. For example, such companies may take steps to increase customer use of services to which customers already subscribe. Alternatively, the business may increase the rates it charges for particular services. This can be a somewhat riskier proposition, however, in that if rates are raised too high customers may choose to drop the service rather than pay the higher rates, resulting in a net loss in revenue. Finally, the business may attempt to increase revenue by selling additional services to existing customers.
In the unending quest for higher profits, businesses will often go to great lengths to increase revenue. Businesses often mount elaborate (and expensive) marketing campaigns designed to influence consumer behavior in a way that will lead to increased revenue. Often such campaigns are directed toward existing customers. Typically such campaigns will offer some incentive to influence the customer's behavior. For example a business may offer reduced rates to a customer for a period of time for signing up for a new service, or a business may offer rewards to customers whose use of a service surpasses a certain threshold. The types and variety of such campaigns are limited only by the creativity of the enterprise's marketing team.
The most effective campaigns are those in which customers are contacted directly. In such campaigns offers may be communicated to customers over many different channels. For example campaign offers may be included in billing statements sent to customers each month. Telemarketing campaigns may be instituted to contact customers by phone. Wireless telephone customers may be reached via text messages sent to their mobile phones. Email messages may be the best channel to reach other groups of customers. Faxes and direct mailings are still other channels by which a business may reach its customers to communicate special offers designed to stimulate revenue growth.
Direct marketing campaigns can be expensive. Because the cost of individually contacting large numbers of customers is high, marketing campaigns are often limited to smaller select segments of the customer population. Ideally each campaign will be directed toward customers who will most likely respond positively to the campaign, and whose positive response will lead to the greatest increase in revenue. For example, when designing marketing campaigns for telecommunications service providers, the incentive offered in a first campaign may be much more attractive to young prepaid mobile phone customers, and the incentive offered in a second campaign may be more attractive to older fixed-line customers. Obviously, offering the first incentive to fixed-line customers above the age of 60 will not likely increase the average revenue per user (ARPU) as much as making the offer to pre-paid mobile customers between the ages of 20-25. Conversely, offering the second incentive to younger pre-paid customers would seem a similar folly.
A number of factors contribute to the success of direct marketing campaigns. The first is that the campaign itself must be tailored to marketing goals. In other words, a marketing campaign intended to increase revenue from a specific service should have the effect of actually raising the revenue received from that service. Secondly, the campaign must be directed toward the appropriate customers. Ideally, every customer contacted during a campaign would accept the offer and the revenue generated from each customer would be increased. This of course is not likely to happen. However, if a marketing campaign is directed toward customers who are most likely to accept the offer, and who are likely to exhibit the greatest increase in revenue when they accept the offer, the odds of success are significantly enhanced.